LCCI, CPPE fault SSB tax bill, highlight dangers to manufacturing sector

By Rukayat Moisemhe

The Lagos Chamber of Commerce and Industry (LCCI) and the Centre for the Promotion of Private Enterprise (CPPE) have said the Sugar-Sweetened Beverage (SSB) Tax Bill being considered by the National Assembly could worsen challenges facing Nigeria’s manufacturing sector.

LCCI and CPPE said this in a separate statement issued in reaction to passage of the Customs, Excise Tariff, etc. (Consolidation) Act (Amendment) Bill 2025, to reform excise duties on sugar sweetened beverages by the Senate.

The bill also aims to strengthen public health financing and addressing the growing burden of non-communicable diseases in Nigeria.

In its own statement issued in Lagos on Monday signed by its Director-General, Dr Chinyere Almona, LCCI said that though it supported efforts to address public health concerns associated with excessive sugar consumption, such interventions should not impose undue burdens on businesses and consumers.

She noted that manufacturers were already grappling with high energy costs, exchange rate volatility, elevated interest rates, logistics bottlenecks, multiple taxation and weak consumer purchasing power.

According to her, the introduction of additional taxes on beverage manufacturers is likely to increase production costs, which can ultimately be passed on to consumers through higher prices.

“This may further worsen inflationary pressures and reduce demand for locally manufactured products.”

The LCCI boss also said that the tax could have unintended consequences across industrial value chains, affecting suppliers, distributors, transport operators, retailers, farmers and service providers linked to the beverage industry.

She added that any decline in production volumes resulting from increased taxation could lead to lower investments, reduced capacity utilisation and potential job losses.

Almona advocated a more balanced approach that combined public health education, voluntary product reformulation, improved product labeling, consumer awareness campaigns and broader stakeholder engagement.

She noted that experiences from more advanced economies showed that similar policies were designed primarily to encourage manufacturers to reduce sugar content in products.

According to her, Nigeria’s SSB tax framework should form part of a broader public health strategy and be carefully calibrated to minimise disruption to industry and employment.

“We want to see manufacturers reformulate their products over a transition period rather than simply raise prices due to SSB taxes.

“A reformulation-focused tax may be more effective than a revenue-focused tax as it can achieve health objectives while preserving industrial activity,”

Almona also stressed the need for policymakers to assess the likely impact of the tax on agriculture, manufacturing and supply chains before implementation, especially in sectors that supported large numbers of jobs.

She urged the Federal Government and the National Assembly to undertake a redesign of the policy through wider consultations with manufacturers, health experts, organised private sector groups, consumer associations and other stakeholders.

” Such engagement will help develop a tax framework that promotes product reformulation while preserving sales, jobs and industrial competitiveness,” she said.

She added that this would ensure that public health objectives were pursued in a manner that supports sustainable industrial development and economic growth.

“We urge the Federal Government and the National Assembly to undertake a redesign exercise through more technical engagement with manufacturers, health experts, organised private-sector groups, consumer associations, and other stakeholders to birth a tax policy that drives product reformulation and preserves sales and jobs.

“This will help ensure that public health objectives are pursued in a manner that preserves economic competitiveness, jobs, and supports sustainable industrial development,” she added

CPPE, an NGO, in its own statement, urged the House of Representatives to reject the sugar-sweetened beverage tax bill, describing it as ill-timed and insensitive to prevailing economic realities for manufacturers.

The Chief Executive Officer, CPPE, Dr Muda Yusuf signed the statement issued on Sunday in Lagos.

He also stressed that the move was inconsistent with the Federal Government’s commitment to reducing the tax burden on businesses and detrimental to Nigeria’s manufacturing sector.

He expressed deep concerns that the Senate had proceeded with the passage of the bill in spite of strong objections from private sector stakeholders, particularly the Manufacturers Association of Nigeria (MAN).

He noted that manufacturers were already contending with high energy costs, elevated interest rates, foreign exchange pressures, logistics challenges, weak consumer purchasing power, and multiple taxes and levies.

Yusuf described the food and beverage industry as one of the strongest pillars of Nigeria’s industrial economy, contributing significantly to manufacturing output and employment.

He said that the sector’s strong linkages with agriculture, packaging, logistics, retail trade, hospitality and distribution made it a key driver of inclusive economic growth.

According to him, imposing additional taxes on the non-alcoholic beverage subsector would increase production costs, raise consumer prices, weaken demand, reduce capacity utilisation and threaten jobs across the value chain.

“The food and beverage industry is one of the strongest pillars of Nigeria’s industrial economy, accounting for a significant proportion of manufacturing output and jobs.

“The non-alcoholic beverages subsector is a major contributor to this ecosystem and should be supported, not burdened with additional taxation.

“Any additional tax burden on the industry would inevitably increase production costs, raise consumer prices, weaken demand, reduce capacity utilisation and threaten jobs across the value chain,” he said.

The CPPE boss also expressed concern over what he described as policy inconsistency, noting that the 2026 fiscal policy framework already provides for an excise duty of N10 per litre on non-alcoholic beverages.

He warned that introducing further taxes through additional legislation would heighten regulatory uncertainty and undermine investor confidence.

“Investors thrive on predictability. Frequent additions to the tax burden send the wrong signal to both existing and prospective investors,” he said.

On the public health justification for the tax, Yusuf acknowledged the need to address the rising incidence of diabetes and other non-communicable diseases.

He, however, argued that sugar taxes alone had limited effectiveness in improving health outcomes.

He said major drivers of diabetes and related illnesses in Nigeria included poor dietary habits, excessive consumption of carbohydrate-rich foods, physical inactivity, sedentary lifestyles, inadequate health awareness and genetic factors.

According to him, lawmakers should instead prioritise nutrition education, public health awareness campaigns, promotion of exercise and physical activity, healthier food choices, preventive healthcare and urban infrastructure that supports active living.

Yusuf maintained that such measures would deliver more sustainable public health benefits without harming production, investment and employment.

He urged House of Representatives to decline concurrence to the bill in the interest of manufacturing sustainability, job preservation, investment confidence and policy coherence.

“The house has historically demonstrated sensitivity to the welfare of citizens and the concerns of productive enterprises.

“We urge members to uphold that tradition by rejecting this legislation in the interest of manufacturing sustainability, employment preservation, investment confidence and policy coherence,” he said. (NAN)